McGraw-Hill projects profits rise

NEW YORK (MarketWatch) -- McGraw-Hill Companies, the debt ratings-to-education publisher, on Tuesday lifted its profit projection for the year after posting a 17.8% rise in second quarter profit to $195 million.

"We are increasing our earnings guidance for the year," the group said. It now expects "double-digit growth" in earnings per share from continuing operations, excluding the 2004 non-cash benefit of 5 cents a share from accrued tax liabilities.

McGraw Hill
MHP, +0.00%
whose properties include Standard & Poor's rating agency as well as BusinessWeek magazine, posted a 16.9% rise in revenue to $1.5 billion, with double-digit gains generated in each of its divisions.

"A very good year is taking shape for the McGraw-Hill School Education Group even if Texas does not provide all the funding we had anticipated in 2005," it said.

Shares rose $2.28, or 5.1% at $46.71. The stock has eased 2.9% since the start of the year.

Rival publisher Pearson Plc.
PSO, -0.90%
on Monday said sales rose 14% in its Education division in the first six months of the year, outpacing the 10% underlying sales gain for the group, which also publishes the Financial Times newspaper.

Pearson, a British company, said it expects its worldwide School business to grow sales in double digits for the year.

At McGraw-Hill, operating profit rose in the Education and Financial Services divisions, but dropped 45% to $13.6 million in Information and Media Services on a decline in advertising and $8.9 million of acquisition-related costs at J.D. Power and Associates.

Per share, net income rose 52 cents from 44 cents a year ago. Income from continuing operations came to 51 cents a share against 43 cents in last year's second quarter, and ahead of analysts' average view for 47 cents a share.

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